My commentary on the broad market has been unusually light in recent weeks as I've had little interest or desire to trade typical equities, other than a couple of recent short trades, instead focusing on select commodities & precious metals. Although I haven't posted many updated charts lately, I have kept the US broad market charts ($SPX, $COMP, $RUT, etc...) found on the Live Charts page updated. In doing so, I've been monitoring what appears to be a possible broadening top, aka- megaphone pattern in the S&P500 as well as some other large caps indices such as the DJ Composite and [...]
The yield on the U.S. 10-year Treasury bond dipped below 2% for the first time since June 2013. For anyone that might have missed an opportunity to refinance over the last few years this could be the last trough in rates before the train leaves the station for good. As today, the average rate on a 15-year mortgage is hovering just above 3% and with today's plunge in rates (a drop of about 5 1/2% on the 10-year rate as I type and that's well off the lows earlier), we could very well see 15-year mortgages below 3% soon, barring any [...]
Long-dated treasury bond yields (10-30 year) have been in a downtrend that kicked off on the first trading day of 2014. Based on my interpretation of the charts below, that trend has likely run its course, at least in the near-term as the odds for a correction (bond prices down/rates up) are quite elevated at this time. The first chart is the daily chart of the TLT (20+ year Treasury Bond ETF) while the following charts are the 10-year Treasury Yield Index ($TNX) and the 30-year Treasury Yield Index ($TYX). Links to the live, updated versions of these charts, as well [...]
A link to the live, annotated chart of TLT (iShares Barclays 20+ Year Treasury Bond Fund ETF) has been added to the Live Charts Links page. A link to that page has also been added to the gray navigation menu at the top of the home page as well. As the screenshot of the TLT chart below illustrates, treasury bonds recently broke out of a bullish falling wedge pattern, complete with positive divergences in place at the recent lows. Although the measured target for the pattern would put TLT somewhere around the 115 area, my current price target runs from about [...]
The first series of charts below are some of the major US stock indices, including annotations. Basically, most US indices, other than the Dow Jones Industrials, continue to make higher highs while nearly all key momentum indicators and price oscillators continue to print lower highs (i.e.- negative divergences). Such multi-month divergences were also formed leading up to correction in the 4th quarter of 2012. Divergences of such magnitude don't always play out for a significant correction but more often than not, they do. This has been [...]
Back on August 26th, I became bullish on bonds (i.e.-bond prices up, rates down). While some of the reasoning for a reversal in rates (treasury yields were just a day or two off multi-year highs at the time) was predicated on a flight to safety from a pullback in the equity markets, which has so far not been the case, I remain near-term bullish on bonds and do still believe that a pullback in the broad markets will likely put some more wind in the sails behind a move down to my price targets as shown in these charts. Of [...]
This 4 hour chart shows my preferred scenario for TLT with the initial, and possibly final (TBD) target. The 38.2% fib retracement is not only a commonly hit level on counter-trend bounces but also happens to line up well with horizontal resistance, including volume at price (VAP) resistance, as defined by the top of that large histogram cluster. My best guess is that if the market does experience additional downside in the coming days to weeks, then treasuries will likely rise due to flight to safety (and of course, the technical posture of this chart).